Revolutionary Tax

It’s like a casino. Pure gambling. Cuban government economists don’t have to envy the financial wizard George Soros. Since October 25, 2004, when Fidel Castro levied an 18 percent tax on the U.S. dollar and 8 percent on other currencies, from this source alone Cuba has banked more than 600 million dollars a year in hard currency.

Let me explain. There is no trick whatsoever. Of the one billion dollars in remittances sent every year by Cuban exiles in Florida, the government pocketed 200 million. Without investing a dime.

If we accept as valid that two million visitors enter the island every year — naive northern Europeans, horny Spaniards hunting dark-skinned girls, relaxed Canadians fleeing the cold, and thousands of Cuban-Americans who come to visit their families — to all without exception, when they exchange money, the government applies the revolutionary tax.

As good Galician descendants, the Castros are reluctant to give figures, especially when it comes to money. So one has to keep accounts on paper. To the 600 million dollars, add 200 million for the tax applied to tourists, assuming that each of them, on average, exchanges 3 thousand U.S. dollars or euros.

And to complete Operation Robin Hood as implemented in Cuba, let’s add another 200 million dollars from high prices charged in establishments that sell goods or offer services for foreign exchange. Since 2004, commodities like oil, soaps, detergents and garments are sold exclusively for Cuban convertible pesos or CUC, the straw currency that hides the Yankee dollar.

$100 in 2002 translates to $60 in the newly released 2010. It’s simple arithmetic. You lose $20 when you change money in the state banks and another twenty when they mercilessly suck your taxes, sometimes in excess of 240 percent, when you go shopping at hard-currency stores.

At the time, the Comandante only justified that kind of abusive tax because the U.S. Department of Treasury, with its regulations resulting from the embargo, had made it impossible to trade with Yankee money. It was really because the Americans discovered four billion U.S. dollars deposited in the Swiss bank UBS from transactions with Cuba, which the Havana government claimed came from sales in hard-currency stores.

I’ve always wondered why they saved so much. Then came the plucking operation. Including Castro’s “good one”; one sunny morning in 2005, told the foreign press that this money was paying for the vaunted “energy revolution”, as he called the replacing of millions of electric appliances from the prehistoric era in most Cuban homes.

Forty-year-old American refrigerators, home cooling fans with industrial motors that made as much noise as an airplane taking off, and Russian television screens in black and white. He distributed poor-quality Chinese rice cookers, televisions and refrigerators. In addition to paying for the new equipment, people had to surrender the old. And the best of it was that the operation to save fuel and to replace archaic appliances was paid for by Cuban exiles, as well as tourists and foreign visitors, with the government tax on foreign exchange. Business full-circle.

Alan Greenspan had to be green with envy. With a government that does not take money from the rich, as did the hero of Sherwood Forest. No. It punishes the Cuban emigre who has to work two jobs in Miami and live in a cheap apartment and make sacrifices to send money to his family in Cuba.

The government always makes a monumental miscalculation, when it supposes that by having a second-hand car, an Apple Computer, a Motorola phone, air conditioning and a satellite dish, a Cuban is a rich guy. Maybe they should look in the mirror. Because they usually have all that paraphernalia and the rest of the people don’t, they presume that the “worms” in Miami are rolling in greenbacks.

It is not new to impose a revolutionary tax that the people don’t want. The Basque terrorist group ETA, made it fashionable for entrepreneurs and bankers to pay large sums of money, as one of the ways to maintain their terror campaign against the Spanish government. Leftist groups have also robbed banks and kidnapped wealthy people, and then demanded a lot of money. Anything goes in pursuit of the conquest of the Dictatorship of the Proletariat.

Of the many omissions that the Castro brothers are silent about, the revolutionary tax on foreign exchange is one of them. As it is also obvious that for 16 years the exiles and their relatives in Cuba have to a large extent maintained the stunted island’s economy.

It is well-known that the Cuban economy is in bankruptcy. And with these reprehensible practices they keep it afloat. The least that the Castros should do, as fond of museums and statues as they are, is to erect a great monument in the heart of Havana to those Cubans in the diaspora who give oxygen to their economy.

Iván García

Translated by: Tomás A.

Advertisements

Like this:

LikeLoading...

Related

Hello Ivan!
Of all the Cuban blogs translated to English, and there are some very good ones, yours is the best. I have my reservations about whether every tourist converts
$3,000 in hard currency on every visit, however. Nevertheless, point well taken on
the taxation aspect. I learn something new every blog! If you have any knowledge of,
please do a piece on the state of relations between the foreign hotel chains and
the government at this time.
Keep up the excellent work.
Signed, relaxed Canadian (who loves Cuba)